The Next 2008: Private Equity Bubble To Bankrupt Pension Funds

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Writes Ginny Garner:

Lew,

Is the entire American pension system going to be bankrupted? Ever heard of back floating rate loans? Private equity firms have taken out adjustable rate loans on which the interest goes up every 30-60 days. Successful companies are going bankrupt trying to pay off these loans. The banks are repackaging loans as CLOs sold to pension funds as great debt. This will touch every industry around us because the private equity firms own day care centers, vet clinics, emergency rooms, HVAC companies, pet stores, nursing homes, doctor’s offices, orthodonics, and builders. This was done intentionally using the carried interest loophole. People might riot if the banks got bailed out again like in 2008; this time most will go along with it because it is the pension funds of their grandparents and parents.

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